Benchmark your risk profile and the impact of those risks

Widespread business transformation is complicating the global risk landscape by exposing companies to risks from multiple directions.

While some of 2012's global market risks are behind us, survey respondents remain concerned about global economic and political pressures. Organizational change and restructuring, talent shortages and greater technology risks are all key transformation-driven risks identified by PwC for 2013.

To see how you stack up against survey respondents, please use our custom tool to benchmark your organization's risk profile and the impact of those risks against your peers.

Once you have entered your responses, you can create a customized PDF file of how your views compare with others, with insights from PwC's Risk Assurance team.

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Benchmarking Tool

Compare your profile against PwC's Risk Assessment survey results

Step 1:Getting started

Step 2:Economic risk

Step 3:Political & regulatory risk

Step 4:Technology risk

Step 5:Risk strategies & techniques

Step 6:See how you compare

Understanding global risks in the transformation age

Transformation is complicating the global risk landscape by exposing companies to risks from multiple directions. Companies are looking hard at what's needed to better identify and manage every aspect of risk. And risk management has become a key strategic growth element.

Complete this five-minute survey to assess your company's risk profile and benchmark it against the results of our survey.

  • Select your key risks and their impact on your organization.
  • Visually compare your responses to survey participants with organizations similar to yours.
  • Download a customized report.

Tell us about your organization

Providing us with information about the industry and region you operate within and your company size allows us to show you how your views compare with organizations that participated in the PwC's Risk Assessment Survey.

Where is your company based?
How large is your company?
In which industry is your company?
Is your company public or private?

Economic Risk

For each of the economic risks, please rate
A) the likelihood of them occurring in the next 18 months
B) the potential impact of the risk on your company, should they occur

Likelihood Impact

Fiscal cliff in the United States


Slowdown in key emerging markets


Exit of multiple countries from the Eurozone


Global financial shocks


Increased recessionary pressures


Systemic banking crisis


Commodity price shocks


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Political & Regulatory Risk

For each of the political & regulatory risks, please rate
A) the likelihood of them occurring in the next 18 months
B) the potential impact of the risk on your company, should they occur

Likelihood Impact

Major reform of financial regulation


Major reform of healthcare regulation


Major reform of energy policy


Major reform of regulation related to data privacy, security and technology


Impact of US FATCA


Increased taxation


Excessive austerity or public spending cuts


New conflict minerals or anti-corruption regulations


Protectionism or anti-globalization backlash


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Technology Risk

For each of the technological change risks, please rate
A) the likelihood of them occurring in the next 18 months
B) the potential impact of the risk on your company, should they occur

Likelihood Impact

New disruptive technology erodes competitive positions or makes products obsolete


Brand or reputation risks from social media or web 2.0


Cyber security including risk of cyberespionage/cybercrime


Major IT programs fail to deliver expected benefits


Significant or prolonged IT systems failure


Loss or theft of intellectual property


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Risk Strategies and Techiques

For each of the risk competencies, please rate
A) the priority your firm places on it
B) how satisfied you are with your organization's current level of competency in each area

Priority Satisfaction

Risk identification, tracking and monitoring


Risk forecasting and scenario analysis


Building up risk function and resources


Building organizational resilience


Auditing non-financial performance


Contingency planning and crisis management


Taking integrated corporate-wide approach to risk and compliance

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Risk in Review: Global risk in the transformation age

Prepared by PwC's Risk Assurance practice

For:

Tim Cook, CEO
Apple, Inc.
PwC's 2013, Risk in Review: Benchmark your organizations risk profile

About Risk in Review

In today's business ecosystem, where organizations and markets form a complex, interlocking, global web, risks can emerge and metastasize quickly, cascading across markets. Companies are reconsidering their risk thinking and approaches, but they're also transforming to align with changing market imperatives-and in the process, exposing themselves to multi-directional risks.

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Ongoing economic uncertainty

Start the conversation
Ken Coy
Partner, US Risk Assurance - Governance, Risk, and Compliance Leader
(213) 217 3000
Ron Kinghorn
Principal, US Advisory - Governance, Risk, and Compliance Leader
(617) 530 5938

Executives realized last year that the market had entered a sustained period of global economic instability and structural change. The long-held assumption that emerging markets were inherently riskier than developed markets began to be called into question. Faced with low growth, heavy debt, and high unemployment in the industrialized world, economic influence was shifting to the emerging markets, which, despite greater operating difficulties, continued to gather strength as centers of economic activity.

Among the respondents to this year's risk survey, a major global economic downturn is again seen as the most serious risk over the next 18 months: Nearly two-thirds of respondents cited such a downturn as likely, and nearly three out of four said it would have a major impact on their organization .

"There is a danger that if executives stay focused on an economic downturn, they may not be able to move fast enough if a market upturn comes."

--Ken Coy, Partner, US Assurance GRC Leader, PwC

Regardless of where the economy heads, executives continue to fear that regulators will exercise greater influence over the next 12 mconths. They are most apprehensive about increased taxation in industrialized markets, which two-thirds consider a probable event with serious consequences. Similarly, about half of respondents view excessive government austerity measures as a powerful threat, particularly as more nations move to reduce their heavy debt burdens.

Your responses
Benchmark

Download the 2013 Risk in Review for our perspective

Schedule a meeting to discuss your Risk strategies

Connect with Dean Simone, PwC Risk Assurance leader on LinkedIn

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Political and Regulatory risk

Start the conversation
Dean Simone
Partner, US Risk Assurance Leader
(267) 330 2070

Regardless of where the economy heads, executives continue to fear that regulators will exercise greater influence over the next 12 months. They are most apprehensive about increased taxation in industrialized markets, which two-thirds consider a probable event with serious consequences. Similarly, about half of respondents view excessive government austerity measures as a powerful threat, particularly as more nations move to reduce their heavy debt burdens. Executives also remain uneasy about the related risks of social or political change, including potential military flare-ups in the Middle East and greater social unrest in Europe, the latter stemming from record high unemployment rates and anger over government austerity measures.

Business transformation makes risk management more complex

To adjust to changing global market conditions, senior management teams will continue over the next year to transform their global business strategies, structures, and operating models. Our survey found that more than two out of three companies have undergone business transformation over the past 18 to 24 months, while another 10% are planning such changes over the next 18 to 24 months.

Your responses
Benchmark

Download the 2013 Risk in Review for our perspective

Schedule a meeting to discuss your Risk strategies

Connect with Dean Simone, PwC Risk Assurance leader on LinkedIn

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Technology risks

Digital transformation presents new risks

"As data continues to grow, leveraging technology to get instantaneous results through data discovery tools will be key," says John Sabatini, Partner, Advanced Risk & Compliance Analytics Services at PwC.

Start the conversation
Scott Greenfield
IT & Project Assurance, Leader
John Sabatini
Principal, Advanced Risk & Compliance Analytics Services
646 471 0335

The continuing evolution and ever-wider adoption of new digital technologies across industries will expose individual companies to a broad range of risks in 2013. Close to 60% of executives think that business transformation will make their companies more vulnerable to technology risks in general. The danger that major IT programs will fail to deliver expected benefits was the biggest specific risk cited by survey respondents.

Social media has also led to new anxieties. While companies see social media as a valuable way to reach stakeholders and track opinion, they worry that it opens them up to brand or reputational damage. More than 40% of survey respondents say social media is likely to put them at risk in the next 18 months. The issue is especially pressing for banks, which face tighter regulations regarding the marketing of their products and services over social media.

Your responses
Benchmark

Download the 2013 Risk in Review for our perspective

Schedule a meeting to discuss your Risk strategies

Connect with Dean Simone, PwC Risk Assurance leader on LinkedIn

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Risk Strategies and techniques

In 2013, executives remain concerned about external market risks even as they retool their organizations to meet new challenges. Continued recessionary pressures, global financial shocks, increased taxation, and excessive government austerity are seen as likely risks that could have serious consequences for business in the year ahead. Widespread business transformation is adding further complexity to the global risk landscape, as senior executives respond to global market shifts by making fundamental changes to their companies’ strategies or operations via avenues such as mergers/acquisitions/divestitures, large-scale outsourcing/offshoring, enterprise-wide IT change.

"It’s not hard to think of industries whose business models are under stress or broken—big box retail, for example,” says PwC’s Dean Simone. “The big box format was transformative 20 years ago, but e-commerce and mobile technologies changed the game. Now, brands that once led the industry are either gone or struggling to evolve. It’s all about adaptation, finding the strategy that will allow you to thrive in today’s environment, and tomorrow’s. Some industries and companies have done it very well—the Detroit automakers, for example, and domestic oil and gas producers. They’ve looked down the trend lines, seen where their worlds are going, and made the right choices to ensure success."

Dean Simone

Risk Assurance Leader, PwC

These changes in business direction can expose companies to new risks, including data security, IP abuses, and political and regulatory pressures in emerging markets, not to mention the possible failure of the new strategies themselves. Further complicating matters, the interplay of market and business transformation is creating complex risk linkages that can be unpredictable, fragile, and difficult to detect. Simultaneously, the demands and expectations of external stakeholders are gaining ever more power: Investors have less tolerance, customers are demanding more for less, and digitally empowered consumers are pushing companies on issues such as sustainability, fair-labor, and local sourcing. Such stakeholder influence further complicates the risk environment, and accelerates the speed and severity with which companies are punished for their mistakes, in both the media and the marketplace.

Our survey findings indicate that in the coming year, companies’ key strategic responses will relate to:

Resilience. Companies are pushing harder to build resilience to emerging risks. Over the next 18 months, more than half of our responding companies will be applying horizon scanning, early-warning systems, scenario planning, and flexible risk appetite statements.

People and organization. More companies are taking organizational measures such as developing risk-related performance incentives and conducting talent audits to identify skills gaps. Our survey respondents plan increases of 79% and 69%, respectively, in their use of these measures.

Technology. To address growing risks from digital technology and social media, companies will nearly double their use of intellectual property, brand, and reputation audits over the next 18 months and take measures to mitigate the risks that are uncovered.

Next-generation risk analytics. Across industries, companies will draw on more sophisticated techniques to identify hidden patterns and risk linkages in large sets of data. The fastest growing tools will include integrated risk data warehouses (whose use is expected to double) and risk dashboards (which will increase by 50%).

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

What this means for your business

Start the conversation
Dean Simone
Partner, US Risk Assurance Leader
267 330 2070

Risk imperatives for 2013

PwC Risk Assurance Leader, Dean Simone suggests that senior executives ask themselves the following questions to ensure their risk management approach is in tune with their business transformation imperatives.

Have you built risk resilience into your organization to respond to unexpected, cascading risks from market and business transformation?

In today's unpredictable, ambiguous, and fast-moving business environment, companies need structures that are resilient to risks when and where they occur. Successful organizations are forging stronger and more direct alignment between risk management and strategic/operational planning and execution to ensure that risk information is transmitted to decision-makers on a timely basis and used to set strategic direction and course-correct as necessary. CROs should increase their use of horizon scanning and early-warning systems to spot trends, and employ stress testing to identify key vulnerabilities. More flexible risk appetite statements, corporate-wide contingency planning, and a risk-aware corporate culture that challenges conventional wisdom can help organizations better manage emerging risks.

Have you adjusted performance incentives so that new, transformative business strategies do not expose your organization to undue risk?

Tom Colligan, a former PwC vice chairman and current board member at Office Depot and other organizations, explains the value of risk-adjusted performance incentives:

"All too often, performance-based compensation encourages executives to take actions that increase risk. For example, such incentives were certainly a contributing factor in the financial crisis." Creating a more balanced scorecard that includes risk-related performance incentives can reduce this threat, Colligan says, although it requires strong board involvement.

Does your risk management system address cyber-risks that can derail a new technology-enabled business strategy?

In today's digital world, business results can be hurt by a minefield of cyber-risks-from system failure and security breaches to intellectual property abuse and reputational damage from the viral effect of social media. Building digital risk into the CRO agenda and driving greater awareness throughout the organization is now crucial. Are you conducting intellectual property, brand, and reputation audits to ensure your assets are properly protected? Do you have programs in place to track and respond to unfavorable social media feedback? Have you set proper controls for new digital approaches such as cloud technology and bring-your-own-device arrangements?

"This is a transformational time for risk management. If companies can't learn how to mitigate unforeseen risks and new combinations of risks, especially, it can hurt customer, shareholder, and regulatory confidence. Business and risk managers will have to get used to using more sophisticated, objective, quantitative methods to handle this-it's not just about personal judgment anymore."

Anil Suri

PG&E

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Study methodology

This study, carried out in November and December of 2012, is based on results from a survey of more than 800 executives and risk managers with businesses worldwide. The sample covered both public (64%) and private companies (36%) across a wide range of countries, with 325 headquartered in the US. The sample reflects a wide distribution of global annual revenue: 38% of responding companies had annual revenue below US$1 billion, 29% between US$1 billion and US$5 billion, and 33% over US$5 billion.

The largest category of respondents by industry was consumer and industrial products and services companies, which represented over 38% of the total. Financial services providers were the next largest group, representing more than 33% of respondents. They were followed by technology, information, communication, and entertainment companies (14%) and healthcare companies (7%, including payers, providers, and pharmaceutical makers). To understand the statistical trends and gain insights into changing risk approaches, we also conducted in-depth personal interviews with CFOs and CROs from a cross-section of industries.

PwC's 2013, Risk in Review: Benchmark your organizations risk profile

Get to know PwC's Risk Assurance team to start a deeper discussion.

Dean Simone
Partner, US Risk Assurance Leader
267 330 2070
Brian Brown
Principal, Risk Assurance Innovation Leader
949 241 5052
Ken Coy
Partner, US Risk Assurance-Governance, Risk, and Compliance Leader
213 217 3000
Ron Kinghorn
Principal, US Advisory-Governance, Risk, and Compliance Leader
617 530 5938
Jason Pett
Partner, US Internal Audit Leader
410 659 3380
John Sabatini
Principal, Advanced Risk & Compliance Analytics Services
646 471 0335
Vikas Agarwal
Managing Director, Advanced Risk & Compliance Analytics Services
646 471 7958
Christopher Michaelson
Director, PwC's Global Advisory Strategy and Risk Institute
612 596 4497
Neelam Sharma
Director, US Risk Assurance Strategy, Sales, and Marketing Leader
973 236 4963